 # Reading 20 yield Curve Strategies Example 6

Hey guys i got confused here a little bit … can somebody explain this to me …

they wrote in this example:

to determine the portfolio positioning: 100 Million 30-year Bonds have a money duration of 100*1972.
it is given that duration is 19.72 and PVBP/ Million is 1972 for 30 years Bonds.

the question is: how did they calculate the money duration here?
I thought it should be the PVBP * 10000.

can u help. Thanks in advance.

From Page 136:

The money duration of a bond is a measure of the price change in units of the currency in which the bond is denominated. Money duration can be stated per 100 of par value or in terms of the bond’s actual position size in the portfolio.

PVBP per 1 million = \frac{1,972}{1,000,000}

Money Duration (based on actual position size) = PVBP per 100 million = \frac{1,972 \times 100}{1 ~million \times 100} = \frac{197,200}{100 ~million}

They didn’t multiply by 10,000 because then it wouldn’t match the PVBP of the other positions (2s, 5s, 10s) when it comes to calculating the positions.

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as I’m reading the answer i realized it is pretty obvious! I don’t know how I didn’t get it.
many thanks for the explanation.

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